Sierra Metals’ Consolidated Financial
Results Will Be Released on August 9, 2021
(All metal prices reported in USD)
Sierra Metals Inc. (TSX:SMT) (BVL:SMT) (NYSE
AMERICAN:SMTS) ("Sierra Metals" or "the Company") announces the
filing of Sociedad Minera Corona S.A.'s ("Corona") unaudited
Financial Statements and the Management Discussion and Analysis
("MD&A") for the second quarter of 2021 ("Q2 2021").
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Image 1: Yauricocha Mine, Chumpe Plant
Flotation Cells (Photo: Business Wire)
The Company holds an 81.8% interest in Corona. All amounts are
presented in US dollars unless otherwise stated and have not been
adjusted for the 18.2% non-controlling interest.
Corona's Highlights for the Three
Months Ended June 30, 2021
- Revenues of US$50.8 million, a 117% increase from Q2
2020.
- Adjusted EBITDA of US$25.9 million, a 231% increase from Q2
2020.
- Total tonnes processed of 328,909, a 62% increase from Q2
2020.
- Net production revenue per tonne of ore milled increased by
42% to US$151.51.
- Copper equivalent pounds production increased 7% to 15.3
million pounds. Cash Cost per copper equivalent payable pound
higher by 55% to US$1.41. All-in sustaining cost ("AISC") per
copper equivalent payable pound higher by 42% to US$2.57.
- Zinc equivalent pounds production increased 29% to 49.9
million pounds. Cash cost per zinc equivalent payable pound
higher by 28% to US$0.43. All-in sustaining cost ("AISC") per zinc
equivalent payable pound higher by 18% to US$0.79.
- $72.5 million of cash and cash equivalents as at June 30,
2021.
- $102.2 million of working capital as at June 30,
2021.
The Yauricocha mine processed 328,909 tonnes during the second
quarter Q2 2021, representing an increase of 62% over the Q2 2020,
despite continuing to face several operational challenges related
to COVID-19. During the quarter, the treatment capacity in the
concentrator plant was increased, obtaining improvements in
efficiency and utilization.
Metal grades were negatively impacted during Q2 2021 due to the
delays in the contribution from the Esperanza zone due to ground
conditions, which have since been addressed and controlled.
Metal production for Q2 2021 was 54%, 35%, 23% and 22% higher
for zinc, silver, gold and lead, respectively, while copper
production was 11% lower compared to the same quarter of 2020.
Luis Marchese, CEO of Sierra Metals, commented, “The Yauricocha
Mine had a relatively strong quarter with increases in throughput,
revenue and net income over the same period in 2020 and over the
previous quarter in 2021. The Mine continues to deal with
operational difficulties related to COVID-19, however, we are
managing the impact using best practices. Our goal continues to be
avoiding any mine closure while ensuring that strict protocols
remain in place to protect the wellbeing of our employees and the
local communities.”
He continued, “Looking ahead at the remainder of 2021 we have
received the final permit required to expand the throughput at
Yauricocha to 3,600 tonnes per day. We continue to work on the
completion of a Preliminary Feasibility Study to support the
planned expansion to 5,500 tonnes per day at the Yauricocha Mine.
Brownfield and greenfield explorations programs are ongoing, and we
continue to work to improve operations and manage costs in this
challenging environment.”
He concluded, “Minera Corona and the Yauricocha Mine continues
to have a strong balance sheet to support the Company's capital
expenditures and growth initiatives, and we continue to work to
improve per share value for all shareholders.”
The following table displays selected unaudited financial
information for the three and six months ended June 30, 2021:
(In thousands of US dollars, except cash cost and revenue
Three
Months Ended
Six Months Ended
per tonne metrics)
June 30, 2021 June 30, 2020
Var %
June 30, 2021 June 30, 2020
Var %
Revenue
$
50,830
23,405
117%
92,755
57,123
62%
Adjusted EBITDA (1)
25,851
7,805
231%
42,024
17,583
139%
Cash Flow from operations
25,620
7,263
253%
42,116
17,319
143%
Gross profit
25,774
8,562
201%
41,923
17,530
139%
Income Tax Expense
(9,111
)
(2,939
)
210%
(15,953
)
(7,709
)
107%
Net Income
12,554
1,849
579%
17,729
3,909
354%
Net production revenue per tonne of ore milled (2)
151.51
106.53
42%
139.86
113.36
23%
Cash cost per tonne of ore milled (2)
61.35
44.27
39%
60.89
59.44
2%
-
Cash cost per copper equivalent payable pound (2)
1.41
0.91
55%
1.45
1.06
36%
All-In Sustaining Cost per copper equivalent payable pound (2)
2.57
1.80
42%
2.62
2.05
28%
Cash cost per zinc equivalent payable pound (2)
0.43
0.34
28%
0.45
0.39
15%
All-In Sustaining Cost per zinc equivalent payable pound (2)
$
0.79
0.67
18%
0.82
0.76
9%
(In thousands of US dollars, unless otherwise stated)
June 30,
2021 December 31, 2020
Cash and cash equivalents
$
72,549
65,027
Assets
262,392
235,263
Liabilities
62,873
53,473
Equity
199,519
181,790
(1) Adjusted EBITDA includes adjustments
for depletion and depreciation, interest expense and other
financing costs, interest income, share-based compensation, Foreign
Exchange (gain) loss and income taxes; see non-IFRS Performance
Measures section of the Company's MD&A.
(2) All-In Sustaining Cost per copper
equivalent pound and All-In Sustaining Cost per zinc equivalent
pound sold are non-IFRS performance measures and include the cost
of sales, treatment and refining charges, sustaining capital
expenditures, general and administrative expense, and selling
expense, and exclude workers' profit sharing, depreciation, and
other non-cash provisions; Cash cost copper equivalent pound sold
and cash cost per zinc equivalent pound sold, net production
revenue per tonne of ore milled, and cash cost per tonne of ore
milled are non-IFRS performance measures; see non-IFRS Performance
Measures section of the Company’s MD&A.
The following table displays average realized metal prices
information for the three and six months ended June 20, 2021, vs
June 30, 2020:
Average realized prices
Three months ended June
30,
Increase
Six months ended June
30,
Increase
In US$
2021
2020
(%)
2021
2020
(%)
Silver ($/oz)
26.80
16.59
62%
26.62
16.58
61%
Copper ($/lb)
4.37
2.40
82%
4.13
2.46
68%
Zinc ($/lb)
1.34
0.89
51%
1.29
0.91
42%
Lead ($/lb)
0.97
0.76
28%
0.94
0.78
21%
Gold ($/oz)
1,818
1,722
6%
1,798
1,654
9%
Corona's Financial Highlights for the
Three and Six Months Ended June 30, 2021
- Q2 2021 revenue of $50.8 million compared to $23.4 million for
the same quarter of 2020. Sales for the quarter increased mainly
due to higher metal prices and the application of new commercial
copper terms since April 2021 that more than offset the lower
amounts of metals sold compared to the second quarter of 2020.
Revenue for H1 2021 was $92.8 million, which is an increase of 62%
from the $57.1 million of revenues in H1 2020. The increase in
revenues was driven mainly by higher average realized metal prices
and decrease in treatment and refining charges as compared to H1
2020.
- Cash Cost per copper equivalent payable pound was $1.41
compared to $0.91 for the same quarter of 2020 ($1.45 for H1 2021
versus $1.06 in H1 2020). Cash Cost per zinc equivalent payable
pound was $0.43 compared to $0.34 for the same quarter of 2020
($0.45 for H1 2021 versus $0.39 in H1 2020).
- AISC per copper equivalent payable pound was $ 2.57 for the
second quarter of 2021 compared to $ 1.80 for the same period of
2020. AISC per zinc equivalent payable pound was $0.79 compared to
$0.67 for the same period of 2020. AISC increased during Q2 2021 as
the increase in the equivalent payable metals could not offset the
increase in costs. Copper equivalent payable pounds increased 5% to
13.8 million and zinc equivalent payable pounds increased 26% to
45.2 million compared to the same quarter of 2020. Sustaining
capital investment was significantly higher as the Company resumed
its capital projects, whereas in Q2 2020, capital projects were
deferred or cancelled due the problems related to COVID. For H1
2021, AISC per copper equivalent payable pound was $2.62 as
compared to $2.05 in H1 2020. The increase was driven by higher
cost of production and 11% decrease in copper equivalent payable
pounds as compared to the six-month period of 2020. AISC per zinc
equivalent payable pound was $0.82 as compared to $0.76 in H1 2020,
as a 5% increase in the zinc equivalent payable pounds partially
offset the increase in costs. Sustaining costs for H1 2021 included
a 6% decline in treatment and refining costs.
- Adjusted EBITDA of $25.9 million for Q2 2021 as compared to
$7.8 million for the same quarter of 2020 and $42.0 million for H1
2021 as compared to $17.6 million for H1 2020, higher primarily due
to increased net income from higher metal prices.
- Operating cash flows before movements in working capital of
$25.6 million for Q2 2021, compared to $7.3 million for Q2 2020.
The increase in operating cash flows before movements in working
capital was primarily due to the increase in revenues, discussed
previously. For the six-month period of 2021, operating cash flows
before movements in working capital increased to $42.1 million from
$17.3 million during the same period of 2020.
- Cash and cash equivalents of $72.5 million as at June 30, 2021,
compared to $65.0 million as at December 31, 2020. Cash and cash
equivalents increased due to $14.9 million of cash generated from
operating activities partially offset by $7.3 million of cash used
in investing activities and $3.1 million used in financing
activities.
- Net income of $12.6 million, or $0.349 per share for Q2 2021
($17.7 million or $0.493 per share for H1 2021) compared to net
income of $1.8 million, or $0.051 per share for Q2 2020 ($3.9
million or $0.11 per share for H1 2020).
Corona's Operational Highlights for the
Three and Six Months Ended June 30, 2021:
The following table displays the production results for the
three and six months ended June 30, 2021:
Yauricocha Production
Three Months Ended June
30
Six Months Ended June
30
2021
2020
% Var.
2021
2020
% Var.
Tonnes processed
328,909
202,534
62%
655,120
487,759
34%
Daily throughput
3,759
2,315
62%
3,744
2,787
34%
Silver grade (g/t)
56.94
66.37
-14%
55.65
66.07
-16%
Copper grade
0.70%
1.21%
-42%
0.63%
1.17%
-46%
Lead grade
1.20%
1.63%
-26%
1.27%
1.59%
-20%
Zinc grade
3.27%
3.48%
-6%
3.49%
3.74%
-7%
Gold Grade (g/t)
0.45
0.62
-27%
0.44
0.66
-33%
Silver recovery
80.14%
82.82%
-3%
79.70%
82.82%
-4%
Copper recovery
72.67%
77.19%
-6%
69.84%
77.19%
-10%
Lead recovery
90.14%
88.08%
2%
90.15%
88.08%
2%
Zinc recovery
89.23%
88.32%
1%
89.82%
88.32%
2%
Gold Recovery
21.99%
21.18%
4%
20.91%
21.18%
-1%
Silver production (000 oz)
483
358
35%
934
853
9%
Copper production (000 lb)
3,697
4,164
-11%
6,379
9,548
-33%
Lead production (000 lb)
7,831
6,406
22%
16,537
15,014
10%
Zinc production (000 lb)
21,133
13,741
54%
45,256
35,387
28%
Gold Production (oz)
1,043
850
23%
1,933
2,104
-8%
Copper equivalent pounds (000's)(1)
15,308
14,354
7%
31,142
34,549
-10%
Zinc equivalent pounds (000's)(1)
49,923
38,723
29%
99,701
93,404
7%
(1) Copper and zinc equivalent pounds for Q2 2021 were
calculated using the following realized prices: $26.80/oz Ag,
$4.37/lb Cu, $1.34/lb Zn, $0.97/lb Pb, $1,818/oz Au. Copper and
zinc equivalent pounds for Q2 2020 were calculated using the
following realized prices: $16.59/oz Ag, $2.40/lb Cu, $0.89/lb Zn,
$0.76/lb Pb, $1,722/oz Au. Copper and zinc equivalent pounds for 6M
2021 were calculated using the following realized prices: $26.62/oz
Ag, $4.13/lb Cu, $1.29/lb Zn, $0.94/lb Pb, $1,798/oz Au. Copper and
zinc equivalent pounds for 6M 2020 were calculated using the
following realized prices: $16.58/oz Ag, $2.46/lb Cu, $0.91/lb Zn,
$0.78/lb Pb, $1,654/oz Au. (2) The increase in copper equivalent
pounds was lower than the increase in zinc equivalents due to the
82% increase in realized prices for copper ($4.37/lb in Q2 2021
versus $2.40/lb in Q2 2020) as compared to the 51% increase in
realized prices for zinc ($1.34/lb in Q2 2021 versus $0.89/lb in Q2
2020)
Quality Control
The contents of this press release have been reviewed by Américo
Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of
Corporate Planning, who is a Qualified Person under National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
About Sierra Metals
Sierra Metals Inc. is a diversified Canadian mining company
focused on the production and development of precious and base
metals from its polymetallic Yauricocha Mine in Peru, and Bolivar
and Cusi Mines in Mexico. The Company is focused on increasing
production volume and growing mineral resources. Sierra Metals has
recently had several new key discoveries and still has many more
exciting brownfield exploration opportunities at all three Mines in
Peru and Mexico that are within close proximity to the existing
mines. Additionally, the Company also has large land packages at
all three mines with several prospective regional targets providing
longer-term exploration upside and mineral resource growth
potential.
The Company's Common Shares trade on the Toronto Stock Exchange
and the Bolsa de Valores de Lima under the symbol "SMT" and on the
NYSE American Exchange under the symbol "SMTS".
For further information regarding Sierra Metals, please visit
www.sierrametals.com.
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Forward-Looking
Statements
This press release contains "forward-looking information" and
"forward-looking statements" within the meaning of Canadian and
U.S. securities laws related to the Company (collectively,
"forward-looking information"). Forward-looking information
includes, but is not limited to, statements with respect to the
Company's operations, including anticipated developments in the
Company's operations in future periods, the Company's planned
exploration activities, the adequacy of the Company's financial
resources, and other events or conditions that may occur in the
future. Statements concerning mineral reserve and resource
estimates may also be considered to constitute forward-looking
statements to the extent that they involve estimates of the
mineralization that will be encountered if and when the properties
are developed or further developed. These statements relate to
analyses and other information that are based on forecasts of
future results, estimates of amounts not yet determinable and
assumptions of management. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
"expects", "anticipates", "plans", "projects", "estimates",
"assumes", "intends", "strategy", "goals", "objectives",
"potential" or variations thereof, or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved, or the negative of any of these terms
and similar expressions) are not statements of historical fact and
may be forward-looking information.
Forward-looking information is subject to a variety of risks and
uncertainties, which could cause actual events or results to differ
from those reflected in the forward-looking information, including,
without limitation, the risks described under the heading "Risk
Factors" in our Annual Information Form dated March 18, 2021 in
respect of the year ended December 31, 2020 and other risks
identified in the Company's filings with Canadian securities
regulators and the U.S. Securities and Exchange Commission, which
filings are available at www.sedar.com and www.sec.gov,
respectively.
The risk factors referred to above is not exhaustive of the
factors that may affect any of the Company's forward-looking
information. Forward looking information includes statements about
the future and are inherently uncertain, and the Company's actual
achievements or other future events or conditions may differ
materially from those reflected in the forward-looking information
due to a variety of risks, uncertainties and other factors. The
Company's statements containing forward-looking information are
based on the beliefs, expectations and opinions of management on
the date the statements are made, and the Company does not assume
any obligation to update forward-looking information if
circumstances or management's beliefs, expectations or opinions
should change, other than as required by applicable law. For the
reasons set forth above, one should not place undue reliance on
forward-looking information.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005403/en/
Mike McAllister V.P., Investor Relations Sierra Metals
Inc. +1 (416) 366-7777 info@sierrametals.com
Ed Guimaraes CFO Sierra Metals Inc. +1(416) 366-7777
Luis Marchese CEO Sierra Metals Inc. +1(416) 366-7777
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